EXHIBIT 10.25
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 29th day of
December, 1999, by and between DEUTSCHE FINANCIAL SERVICES CORPORATION, a Nevada
corporation ("DFS"), International Data Products, Corp, a Maryland corporation
("IDP" or "Borrower"), Puerto Rico Industrial Manufacturing Operations
Acquisition, Corp., a Puerto Rico corporation ("PAC"), Xxxx Computer
Corporation, a Virginia Corporation ("Xxxx VA"), and Xxxx Computer Corporation,
a Delaware Corporation ("Xxxx Del"). Xxxx VA, PAC and Xxxx Del are hereinafter
collectively referred to as Guarantors.
Recitals
A. DFS and IDP are parties to that certain Business Financing Agreement dated
May 27, 1993, as amended ("IDP BFA"), whereby IDP agreed to pay to DFS any
and all indebtedness owing by virtue of advances made by DFS on behalf of
IDP for working capital. DFS and IDP also are parties to that certain
Agreement For Wholesale Financing dated October 15, 1991, as amended ("IDP
AWF") whereby IDP agreed to pay DFS any and all indebtedness owing by
virtue of advances made by DFS on behalf of IDP for its acquisition of
inventory. The IDP AWF and IDP BFA are collectively referred to as the
"Financing Agreement." IDP, NationsBank, N.A., and DFS are parties to a
Third-Party Lockbox Service Agreement dated November 20, 1996 (the
"Lockbox Agreement"), which established the Collection Account, as defined
in the Lockbox Agreement.
B. DFS and PAC entered into an Assumption and Assignment Agreement dated May
1, 1998 wherein PAC assumed the obligations of Puerto Rico Industrial
Manufacturing Operations, Corp., a Puerto Rico corporation ("PRIMO") to
DFS. PAC also entered into an Agreement For Wholesale Financing with
Deutsche Financial Services Puerto Rico Corporation dated May 1, 1998
("PAC AWF").
C. As a requirement of the advance of funds by DFS on behalf of Borrower, the
Guarantors unconditionally guarantied the performance of Borrower's
obligations under the Financing Agreement in accordance with the terms and
conditions of the Guaranty agreements each dated May 1, 1998 from Xxxx VA,
Xxxx Del and PAC (collectively the "Guaranty").
D. Pursuant to the provisions of the Financing Agreement, Borrower granted to
DFS, as security for the repayment of all advances and indebtedness owed
to DFS by Borrower, a first priority security interest in all of
Borrower's inventory, equipment, fixtures, accounts, contract rights,
chattel paper, security agreements, instruments, deposit accounts,
reserves, documents, and general intangibles, and all judgments, claims,
insurance policies, and payments owed or made to Borrower thereon, whether
now owned or hereafter acquired, and all attachments, accessories,
accessions, returns, repossessions, exchanges, substitutions and
replacements thereof and all proceeds thereof (all of which is hereinafter
collectively referred to as the "Collateral").
E. DFS asserts that it properly perfected its security interest in the
Collateral by recording its UCC-1 Financing Statement with the Maryland
Secretary of State's office and Virginia Secretary of State's office.
G. As contemplated by the terms and conditions of the Financing Agreement,
DFS has made advances on behalf of Borrower, who was obligated to DFS
under the Financing Agreement in the principal sum of $4,694,468.33 as of
the close of business on October 7, 1999, consisting of $1,638,836.39
pursuant to the accounts receivable credit facility under the IDP BFA and
$3,055,631.91 pursuant to the supplemental inventory credit facility under
the IDP BFA, plus interest of $32,863.58 accrued through September 30,
1999 and interest on the unpaid principal balance from October 1, 1999 at
the Prime rate per annum, as well as fees, collection expenses, including
attorneys fees, due under the Financing Agreement and any additional
advances of credit made by DFS on behalf of Borrower and interest thereon
("Debt").
H. As of November 8, 1999, Borrower's obligations to DFS pursuant to the
Financing Agreement were in default, and Borrower failed to cure certain
events of default. As a result of the defaults by Borrower, Borrower and
Guarantor acknowledged that DFS was entitled to enforce its rights
pursuant to the Financing Agreement and Guaranty.
I. DFS, Borrower, and Guarantor entered into a Forbearance Agreement dated
November 8, 1999 (the "Forbearance Agreement"), whereby DFS agreed to
Borrower's and Guarantor's request to forbear from the exercising some of
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DFS' rights and remedies provided under the Financing Agreement and
Guaranty and under applicable law in consideration of Borrower's agreement
to comply with the terms and conditions set forth in the Forbearance
Agreement and with the Guarantor's consent to the provisions set forth in
the Forbearance Agreement and the Confirmation of the Guaranty, and each
of them.
J. Subject to the terms and conditions set forth herein, DFS has agreed to
release its liens in certain of the Collateral (as set forth on Exhibit A)
and in the Collection Account and to subordinate its interests in certain
other Collateral.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, DFS, Borrower and
Guarantor agree as follows:
1. Funds. On or before December 29, 1999, the Borrower and Guarantor will cause
the amount of $2,260,754.93 to be transmitted to DFS by Federal Reserve wire
transfer (the "Funds").
2. Balance of Debt. Assuming DFS's receipt of the Funds, the remaining principal
balance of the Debt in the sum of $831,652 will be paid by Borrower or
Guarantors over no more than 24 equal monthly installments, with interest at the
Prime Rate (as defined in the New 2000 Note, attached hereto as Exhibit B, from
January 1, 2000, which payments shall commence on February 1, 2000 and be
payable on the 1st day of each of the following 23 months.
3. New 2000 Note. In lieu of the 2000 Note (as defined in the Forbearance
Agreement), Borrower and Guarantors will execute a confessed judgment note in
the form as attached hereto as Exhibit B (the "New 2000 Note") for the amount of
$831,652. DFS shall be entitled to file the confessed judgment against Borrowers
and Guarantors upon material default by Borrower or Guarantors of the terms of
this Agreement or the New 2000 Note, including, without limitation, any payment
default. The New 2000 Note shall be delivered to counsel for DFS with the
execution of this Agreement.
4. Partial Release/Subordination of Collateral. In [ILLEGIBLE] for the payment
of the Funds as provided in
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Paragraph 1 and the delivery of the New 2000 Note, DFS will (a) release its
liens in certain of the Collateral, as is listed on Exhibit A; (b) issue
instructions to Bank of America, N.A., as successor in interest to NationsBank,
N.A., that the interest of DFS in the Collection Account is terminated and
released; and (c) upon request by Borrower, DFS shall enter into an agreement
with lender of Borrower providing for DFS' subordination of its security
interest in the Collateral. Any amounts received in the Collection Account after
the receipt of the Funds, or not previously credited to the Borrower, shall be
the property of the Borrower and shall be released to the Borrower.
Notwithstanding anything in this Agreement, DFS shall have no obligation under
this Paragraph 4 unless the Funds are received by DFS by the close of business
on December 29, 1999, and until the original executed New 2000 Note is received.
Except as expressly provided herein, nothing contained herein shall be deemed to
waive or release DFS' rights in other Collateral of Borrower or PAC.
5. To the extent that DFS provided provisional credit for funds received in the
Collection Account prior to the date hereon, and any deposits into the
Collection Account are returned or otherwise result in a chargeback to the
Collection Account ("Chargebacks"), Borrower will remit the amount of any
Chargebacks to DFS within five working days of notice to Borrower.
6. Amendment of Documents; Governing Effect; Binding Arbitration. This Agreement
shall be deemed to constitute an amendment of the Forbearance Agreement, the
Financing Agreement, and Guaranty to the extent required to cause said documents
to be in compliance with the terms and conditions set forth in this Agreement.
To the extent that the terms and provisions of the Forbearance Agreement, the
Financing Agreement, Guaranty, or any other agreement between DFS and Borrower
shall be inconsistent with the provisions of this Agreement, the provisions of
this Agreement shall govern. Otherwise, all terms and provisions of the
Forbearance Agreement, the Financing Agreement and Guaranty shall continue in
full force and effect, as provided in this Agreement, specifically including but
not limited to all provisions requiring binding arbitration.
7. Further Action. The parties hereby agree to execute and deliver such
additional documents and to take further action as may become necessary or
desirable to fully carry out the provisions and intent of this Agreement.
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THIS AGREEMENT has been executed to be effective as of the day and year
first above written.
Deutsche Financial Services Corporation
By: /s/ [ILLEGIBLE]
-------------------------------------
Its: Vice President, Operations
CORPORATE ACKNOWLEDGMENT
STATE: OF MASSACHUSETTS )
) ss:
COUNTY OF NORFOLK )
On the ___ day of December, 1999, before me personally came, Xxxx X.
Xxxxxxx, who being by me duly sworn, did depose and say that he is the vice
president/operations of Deutsche Financial Services Corporation, known to me to
be the officer who executed the within Agreement on behalf of said corporation,
and acknowledged to me that they executed the same for the purposes therein
stated.
___________________________________
Notary Public
My commission expires:
International Data Products, Corp.
By: ________________________________
Its:________________________________
CORPORATE ACKNOWLEDGMENT
STATE OF VIRGINIA )
) ss:
COUNTY OF )
On the ___ day of December, 1999, before me personally came, Xxxxxx X.
Xxxxx, who being by me duly sworn, did depose and say that he is the President
of International Data Products, Corp., known to me to be the officer who
executed the within Agreement on behalf of said corporation, and acknowledged to
me that they executed the same for the purposes therein stated.
___________________________________
5
THIS AGREEMENT has been executed to be effective as of the day and year
first above written.
International Data Products, Corp.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: President
-------------------------------
Xxxx Computer Corporation (a Virginia Corporation)
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: President
-------------------------------
Xxxx Computer Corporation (a Delaware Corporation)
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: President
-------------------------------
Puerto Rico Industrial Manufacturing Operations Acquisition,
Corp.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: President
-------------------------------
Deutsche Financial Services Corporation
By:
--------------------------------
Its:
-------------------------------
PROMISSORY NOTE
DATE: December 29, 1999
PRINCIPAL AMOUNT: $831,652.00
1. FOR VALUE RECEIVED, the undersigned, INTERNATIONAL DATA PRODUCTS
CORP., a Maryland corporation, Puerto Rico Industrial Manufacturing Operations
Acquisition, Corp., a Puerto Rico corporation, Xxxx Computer Corporation, a
Delaware corporation, and Xxxx Computer Corporation, a Virginia corporation
(referenced herein, collectively and individually, as the "Maker"), jointly and
severally, promise to pay to Deutsche Financial Services Corporation, a Nevada
corporation, its successors, its assigns, or any subsequent holder of this Note
(the "Payee"), without offset, in immediately available funds in lawful money of
the United States at Deutsche Financial Services Corporation, 000 Xxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or at such other address as Payee may
direct, the principal amount of $831,652.00, plus interest at the Prime Rate
according to Chase Manhattan Bank (the "Prime Rate"), which shall accrue from
January 1, 2000, until paid. The Prime Rate will change and take effect for
purposes of this Promissory Note on the day that Chase Manhattan Bank announces
any change in its Prime Rate.
2. Payment shall be made by Maker as follows: This Note shall be
paid in twenty four (24) installments of equal principal payments of $34,652.17,
plus accrued interest at the Prime Rate, paid in arrears and due with each
principal
installment. Each installment shall be paid by the 1st of each month, commencing
on February 1, 2000.
3. If any one or more of the following events (a "Default") occurs,
then Payee, at its option, may declare this Note to be in default, whereupon
this Note and the total outstanding principal balance, and all other obligations
under this Note, including all accrued interest, shall become immediately due
and payable without demand or notice: (i) Maker defaults in making any payment
which is due and payable under this Note (a "Payment Default"); (ii) the filing
of a voluntary or involuntary petition by or with respect to Maker under any of
the provisions of the federal bankruptcy laws; (iii) issuance of a warrant of
attachment or for distraint, or of a notice of tax lien, with respect to Maker
or its assets; or (iv) entry of a judgment against Maker or against the property
of Maker, which is not satisfied after thirty days. Maker shall inform Payee of
the occurrence of any event described above in subsections (ii), (iii) or (iv),
and failure to so inform Payee will be an event of Default.
4. Any amounts payable under this Note which are not paid when due
shall bear interest, from the date due and payable, until the date paid, at the
Prime Rate, plus 2% per annum.
5. Maker hereby waives presentment, demand, protest, notice of
default, notice of protest, notice of dishonor, notice of acceleration or intent
to accelerate, and all exemptions,
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including, but not limited to, those relating to attachment, garnishment or
execution. Maker agrees that its liability shall not be affected or impaired by
any failure of Payee to proceed or exercise any remedies against any other
person.
6. Any delay or failure on the part of Payee to enforce any
provision of this Note shall not act as a waiver of enforcement of any
provision by Payee. Any acceptance by the Payee from time to time of any payment
under the Note which is past due and payable at the time of such payment under
the Note or which is less than the payment in full of all amounts due at the
time of such payment shall not constitute a novation, waiver or impairment of
any of the rights of the Payee under this Note.
7. If the inclusion of any provisions, provision or any part thereof
in this Note affects the validity or enforceability of this Note, or renders
this Note nonnegotiable, such provision(s) or that part shall be treated as if
it did not appear in this Note; but all remaining terms and provisions of this
Note shall be fully effective.
8. The Maker warrants this Note is made for a commercial purpose and
is not for personal, family or household purposes.
9. The Maker hereby waives any right Maker may have to a trial by
jury in any litigation between the Parties arising from this Note.
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10. In the event of Default, the Maker authorizes and appoints
Xxxxxxxxx Xxxxxxxxx, Esq., to appear for Maker, to waive the issuance and
service of process and to enter judgment by confession with the Clerk of the
Circuit Court for Arlington County, or the Clerk of the United States District
Court for the Eastern District of Virginia, Alexandria Division, in favor of
Payee for the balance then due on this Note, together with court costs,
interest, and actual and reasonable attorneys fees. If by reason of the
acceleration of the unpaid principal balance of this Note for any cause, or if,
for any other reason, interest in excess of the highest legal contract rate in
the Commonwealth of Virginia shall at any time be paid, any such excess shall
constitute and be treated as a payment on the principal hereof and shall operate
to reduce such principal balance.
11. The validity and construction of this Note and all matters
pertaining hereto shall be determined in accordance with the laws of the
Commonwealth of Virginia.
12. This Note constitutes the entire agreement of the parties and
may only be amended by written instrument executed by Maker and Payee.
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IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
Attest/Witness: INTERNATIONAL DATA PRODUCTS CORP.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- -------------------------------------
Xxxxxx X. Xxxxx, President
Attest/Witness: PUERTO RICO INDUSTRIAL
MANUFACTURING OPERATIONS
ACQUISITION, CORP.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- -------------------------------------
Xxxxxx X. Xxxxx, President
Attest/Witness: XXXX COMPUTER CORPORATION
(a Delaware Corporation)
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- -------------------------------------
Xxxxxx X. Xxxxx, President
Attest/Witness: XXXX COMPUTER CORPORATION
(a Virginia Corporation)
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- -------------------------------------
Xxxxxx X. Xxxxx, President
